Governments aren't perfect, but it's the libertarians who bleed us dryNorthern Rock's former chairman liked to rage against regulation, until his bank had to beg 16bn pounds from the detested state
Note: For those who don't know about Northern Rock, check hereGeorge Monbiot
Tuesday October 23, 2007
The Guardian'The little-known ninth law of thermodynamics states that the more money a group receives from the taxpayer, the more it demands and the more it complains." Thus wrote Matt Ridley in 1994. He was discussing farm subsidies, but the same law applies to his chairmanship of Northern Rock. Before he resigned on Friday, the bank had borrowed ?16bn from the government and had refused to rule out asking for more. Ridley and the other bosses blamed everyone but themselves for this disaster.
I used to read Ridley's columns religiously. Published by the Telegraph in the 1990s, they were well-written, closely argued and almost always wrong. He railed against all government intervention and mocked less enlightened beings for their failure to understand economics and finance. The rightwing press loved him because he appeared to provide a scientific justification for the deregulation of business.
Ridley's core argument, which he explains at greater length in his books, is that humans, being the products of natural selection, act only in their own interests. But our selfish instincts encourage us to behave in ways that appear altruistic. By cooperating and by being perceived as generous, we earn other people's trust. This allows us to advance our own interests more effectively than we could by cheating, stealing and fighting. To permit these beneficial genetic tendencies to flower, governments should withdraw from our lives and stop interfering in business and other human relations. Ridley produced a geneticist's version of the invisible hand of the market, recruiting humanity's selfish interests to dole out benefits to everyone.
Ridley, who has a DPhil in zoology, is no stranger to good science, and his explorations of our evolutionary history, which are often fascinating and provoking, are based on papers published in peer-reviewed journals. But whenever a conflict arose between his scientific training and the interests of business, he would discard the science. Ignoring hundreds of scientific papers that came to the opposite conclusion, and drawing instead on material presented by a business lobby group called the Institute of Economic Affairs, he argued that global temperatures have scarcely increased, so we should stop worrying about climate change. He suggested that elephants should be hunted for their ivory, planning laws should be scrapped, recycling should be stopped, bosses should be free to choose whether or not their workers get repetitive strain injury and companies, rather than governments, should be allowed to decide whether or not the food they sell is safe. He raged against taxes, subsidies, bailouts and government regulation. Bureaucracy, he argued, is "a self-seeking flea on the backs of the more productive people of this world ... governments do not run countries, they parasitise them".
I studied zoology in the same department, though a few years later. Like Ridley, I am a biological determinist: I believe that much of our behaviour is governed by our evolutionary history. I accept the evidence he puts forward, but draw completely different conclusions. He believes that modern humans are destined to behave well if left to their own devices; I believe that they are likely to behave badly. If you belong to a small group of intelligent hominids, all of whom are well known to each other, you will be rewarded for cooperation and generosity within the group. (Though this does not stop your group from attacking or exploiting another.) If, on the other hand, you can switch communities at will, travel freely, buy in one country and sell in another, hire strangers then fire them, you will gain more from acting only in your own interest. You'll have an even stronger incentive to act against the common good if you run a bank whose lending and borrowing are so complex that hardly anyone can understand what is happening.
Ridley and I have the same view of human nature: that we are inherently selfish. But the question is whether this nature is subject to the conditions that prevailed during our evolutionary history. I believe they have changed: we can no longer be scrutinised and held to account by a small community. We need governments to fill the regulatory role vacated when our tiny clans dissolved.
I can offer nothing more than speculation, but Ridley has had the opportunity to test his beliefs. He took up his post - which was previously held by his father, Viscount Ridley - in 2004. Under his chairmanship, the Economist notes, Northern Rock "pushed an aggressive business model to the limit, crossing its fingers and hoping that liquidity would always be there". It was allowed to do so because it was insufficiently regulated by the Bank of England and the Financial Services Authority. When his libertarian business model failed, Ridley had to go begging to the detested state. If the government and its parasitic bureaucrats had not been able to use taxpayers' money to clear up his mess, thousands of people would have lost their savings. Northern Rock would have collapsed, and the resulting panic might have brought down the rest of the banking system.
The ?16bn bailout is not the end of the matter. Last week the Treasury granted Northern Rock's customers a new tax break. Now one of the north-east's leading businessmen, Sir Michael Darrington, is calling for the bank's full-scale nationalisation in order to prevent further crises. So much for the virtues of unregulated free enterprise.
Wherever modern humans, living outside the narrow social mores of the clan, are allowed to pursue their genetic interests without constraint, they will hurt other people. They will grab other people's resources, they will dump their waste in other people's habitats, they will cheat, lie, steal and kill. And if they have power and weapons, no one will be able to stop them except those with more power and better weapons. Our genetic inheritance makes us smart enough to see that when the old society breaks down, we should appease those who are more powerful than ourselves and exploit those who are less powerful. The survival strategies that once ensured cooperation among equals now ensure subservience to those who have broken the social contract.
The democratic challenge, which becomes ever more complex as the scale of human interactions increases, is to mimic the governance system of the small hominid troop. We need a state that rewards us for cooperating and punishes us for cheating and stealing. At the same time, we must ensure that the state is also treated like a member of the hominid clan and punished when it acts against the common good. Human welfare, just as it was a million years ago, is guaranteed only by mutual scrutiny and regulation.
I doubt that Ridley would be able to sustain his beliefs in a place where the state has broken down. Unless taxpayers' money and public services are available to repair the destruction it causes, libertarianism destroys people's savings, wrecks their lives and trashes their environment. It is the belief system of the free-rider, who is perpetually subsidised by responsible citizens. As biologists we both know what this means. Self-serving as governments might be, the true social parasites are those who demand their dissolution.
